Flipkart, the Indian e-commerce giant controlled by Walmart, is making progress towards initial public offering immediately after the fourth quarter of this year, according to insiders.
The American retail giant has set up an internal IPO team for Flipcard and is leaning towards a traditional U.S. debut, people said, begging not to be named because the details are private. Flipkart had researched public disclosure through a blank check company to speed up the listing process, but that route is not being considered now, one person said. The start-up’s valuation could reach $ 35 billion (approximately 2,610 kroner) when it goes public.
Walmart shares rose 1.1% to $ 140.92 (approximately Rs 10,500) in trading in New York on Tuesday before retreating unchanged after Bloomberg News reported on a potential IPO.
Sarod Panigrahi, a former JPMorgan Chase lawyer hired by Flipkart in December, is leading the IPO process, people said. JPMorgan and Goldman Sachs are in talks with the deal to consult on the deal and are leading to be formally selected, they added.
Discussions about the IPO are still changing and may change. It is possible that Flipkart will eventually choose a location other than the United States, one person said.
E-commerce has emerged as the clear winner of the coronavirus pandemic, with growing demand around the world prompting investors to bet on the future of the business. The South Korean Coupang became publicly available in the United States in March as an offer, with investors quickly raising its valuation to more than $ 75 billion (approximately Rs 5,577,290).
Amazon, which competes with Flipkart in India, saw its shares jump more than 75% last year. It is now valued at more than $ 1.6 trillion (approximately Rs. 1,18,92,910 crores).
“Flipkart’s IPO will be a major, exciting public offering and a very important milestone for India’s start-up ecosystem,” said Neha Singh, co-founder and CEO of private market intelligence researcher Tracxn Technologies.
In India, the influx of start-ups is moving to public markets this year and next, with at least 10 proposals in the queue. These include India’s online insurance aggregator, Policybazaar, and the leading food delivery platform Somato.
Flipkart was founded in 2007 and acquired by Walmart 11 years later in the largest acquisition of the American retailer so far. Today, Flipkart includes a fashion retailer Myntra and Flipkart Wholesale, its digital market for small and medium-sized businesses. There are over 300 million registered users, over 150 million products in over 80 categories.
Walmart’s purchase was initially met with skepticism, reflected in falling stock prices. The American giant is struggling to make a profit in e-commerce, and investors are worried that it is paying too much for a losing business away from headquarters.
A successful Flipkart debut could put an end to all annoying concerns.
“With an IPO, all doubts will be allayed and Walmart will return in full force,” Singh said.
Shardul Amarchand Mangaldas & Co. Law Firm will represent Flipkart in India.
© 2021 Bloomberg LP
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